A common misconception is that estate planning is only for the wealthy, the elderly, and married couples with kids. In fact, estate planning is for everyone—even single people. Arguably, estate planning for a single person is more important because there is no spouse, the most natural inheritor of an estate. It is imperative that a single person specify who will receive their assets at death. Otherwise, that decision may be made by other family members, or even worse, by the state.
Let’s explore why single people need estate planning too.
Dying Without a Will
If you pass away without a will, it is known as dying intestate. Each state has its own intestate laws that essentially create a will for you. Who inherits your assets depends on who is alive at the time of your death and their relationship to you.
For example, in both New York and New Jersey, the intestate succession laws are the same. When you die, if you have living children, they will inherit your money and property. If you do not have children, or none are alive at the time you pass, your parents inherit everything. If your parents are not alive, nor do you have any surviving children, your siblings will be the inheritors. This pattern continues along your bloodline to the point where your surviving grandparents or cousins could potentially inherit your assets.
By creating a will, you can control whether a family member, treasured friend, or charitable organization will receive your money and property. Otherwise, the state will decide who gets your hard-earned assets.
Estate planning comes into play during your lifetime, not just after death. If you become incapacitated, say from an accident, illness, or old age, you want someone trustworthy to make your medical and financial decisions. If you do not designate anyone, the state will, and that person could be a complete stranger.
Durable Power of Attorney
This legal document authorizes an agent to act on your behalf if you are unable to do so. With a durable power of attorney, the agent can handle your financial affairs and personal affairs. For example, your agent can buy or sell real estate, sign legal documents, open a bank account, and do almost anything you could do if you had the capacity.
At your death, however, the agent no longer has the power to act for you.
Advanced Healthcare Directive
An advanced healthcare directive is a document that allows you to appoint an agent to make medical decisions on your behalf. This document will include your instructions and wishes regarding future medical care.
Similar to an advanced healthcare directive, a living will specifies the medical treatment you wish to receive if you are facing the end stages of life. Typically, this document includes preferences about artificial nutrition and hydration, do not resuscitate (DNR) orders, and organ donation.
Depending on the value of your estate, you may need to do some planning to minimize estate taxes. For some, these taxes can be substantial and drain a significant portion of wealth from your estate. Married couples have the advantage of being able to leave their assets to their spouse, free of estate tax. Although singles do not have this benefit, with proper estate planning, you can lessen and even avoid this potential tax burden. At The Law Office of Andrew M. Lamkin, P.C., we can help you accomplish this by creating trusts and planning for charitable giving.
Planning for Minors and Other Dependents
If you have minor children or other dependents, you will want to plan for their continued care after you are gone. Trusts are a great estate planning tool that provides flexibility and privacy.
A trust is a legal document that creates a fiduciary relationship, where the person creating the trust (grantor) designates a trustee who holds and distributes assets to a beneficiary according to the terms of the trust.
Trusts allow you to be specific and detailed about what happens with the assets you put into the trust. This type of flexibility is not possible with a will. For instance, if you leave your estate to your minor child, he or she will inherit the amount in one lump sum at the age of 18. With a trust, on the other hand, you can have your assets roll over to the trust when you die and specify when and in what amounts your child will receive distributions.
Unlike a will that becomes public record once filed for probate, trusts are private documents. Only the parties to the trust, and anyone else you share it with, know its contents.
You can even create a trust for the care of your pet. For example, you can place a certain amount of money into a trust and designate an individual or organization to use that money for your pet’s care.
The Law Office of Andrew Lamkin, P.C., Provides Estate Planning for a Single Person
There are many reasons why single people need estate planning too. Making these important decisions now will hopefully ease some stress and anxiety about the future. Not only are you protecting your assets, but you’re also laying out a clear plan for your loved ones to follow during an already emotional time. Whether a friend or family member is serving as your healthcare agent or distributing the assets in your estate, with a thorough estate plan you can avoid the burden of having them guess what you would have wanted.
The thought of estate planning can be morbid, but death is inevitable. Give yourself peace of mind by planning for it now. At The Law Office of Andrew Lampkin, P.C., our lawyers takes the time to create a comfortable environment for you to explain your current situation and your wishes for the future. With this information, we create a custom, comprehensive estate plan that meets all of your needs and desires. Contact our lawyer Andrew M. Lamkin to start planning for now and later.